When your Partner Strategy is your Go to Market Strategy
I like this diagram of the technology adoption lifecycle, from Geoffrey Moore’s Crossing the Chasm.
One key takeaway – your go to market strategy changes as you move from early adopters to mass market. In the early stages when you are selling to innovators you need to use direct sales. The early adopters want to buy cool new technology and they are tolerant of problems. They will deploy the technology themselves and integrate it with other systems. Acting as their own systems integrator. Later, as you cross the chasm and move towards wider adoption you need to move to a value-added reseller (VAR) model. The pragmatic line of business buyer wants to buy a “whole product”. They have a specific business problem they are looking to solve. They want the complete solution to solve this problem. That could be software, professional services, training, support etc…
There are a couple of other instances where your partner strategy is in essence your go to market strategy;
1. Partners are the only way to get at a segment of the market
At Oracle, I was on a small specialized group. We focused on reseller partnerships with business process outsourcers (BPOs). Some companies outsource the entire call center stack to a BPO. This includes the technology and people to answer the phones. Some companies abdicate the decision to the outsourcer about what technology to use. Oracle had to partner with BPOs or miss out on an entire segment of the market.
At TeraGo, their entry into the IaaS market was dependent on reseller partners. Their traditional business was wireless internet access. Typically, that is sold to a different buyer than who makes the decision about hosting applications. The go to market model is to partner with systems integrators and VARs. They have the relationships with the IT decision makers.
2. Partners provide the whole product that customers are demanding
At Genesys, we had identified “cross channel conversations” as a big problem area for our customers. How to serve users on a website calling for customer service but not being recognized. They would have to start their entire interaction over when they crossed from the web to the phone. This was a big complex problem. We had to partner with LivePerson, for a component of the solution. When we combined Genesys with LivePerson, we had created the “whole product” that customers were looking for.
2. Customers want to buy from partners
At Genesys, we wanted to sell the combined Genesys – LivePerson product to retail banks. We chose to do that through partners such as Accenture. The big banks preferred to do transformation projects with large consultancy such as Accenture. Trying to sell direct was often painful and a long sales cycle. Accenture would often have standing projects running at banks where our solution would fit.
Partnerships often get second-class status inside a SaaS or enterprise software company. This is short sighted. Often, partnerships are the best or only option to get at a segment of the market. When executed properly your partnerships can be an effective go to market strategy.